Graham-Cassidy Proposal Unexpectedly Gains Momentum, Floor Vote Next Week Uncertain

Seeing the proposal as a last-minute opportunity to repeal and replace the Affordable Care Act (ACA) prior to the expiration of key procedural powers at the end of the month, Senate Republicans have been quickly attempting to gather votes on H.R. 1628 by Senators Lindsey Graham (R-South Carolina) and Bill Cassidy (R-Louisiana) and cosponsored by Senators Dean Heller (R-Nevada) and Ron Johnson (R-Wisconsin).

However, Senator John McCain (R-Arizona) announced this morning that he will not be voting in support of the legislation. McCain joins Senator Rand Paul (R-Kentucky) in opposition, likely sinking the Republicans’ current attempt at repealing the ACA. Senators Susan Collins (R-Maine) and Lisa Murkowski (R-Alaska) have yet to publicly announce their support of or opposition to the proposal; during the last attempt to repeal the ACA, Collins and Murkowski voted against the proposal.

The Graham-Cassidy legislation would use $1.2 trillion in funds spent under the ACA’s tax credits, Medicaid expansion, and cost-sharing payments to instead provide states with large block grants. States could use federal funds largely as they see fit and apply for waivers, and major components of the ACA would be overhauled or completely eliminated under the measure. For example:

• Medicaid funding for states would switch from an open-ended basis to a capped per-capita basis
• Medicaid expansion would be eliminated and funds would be reallocated to states
• Essential health benefits, including maternity care, prescription drug coverage, and mental health services, would vary as states would be permitted to apply for waivers as to what qualifies as an essential health benefit. This would also impact coverage of pre-existing conditions and threaten prohibitions on annual and lifetime limits of insurance coverage.
• Individual and employer mandates for health coverage would be eliminated
• Cost-sharing reduction payments to insurers to cover medical costs for lower-income patients would be eliminated
• Tax credits for low-to-middle income Americans to defray cost of insurance premiums would be eliminated

The Congressional Budget Office (CBO) has indicated it does not have enough time to produce a full analysis of the potential impact of the Graham-Cassidy proposal before its vote next week. However, the CBO is aiming to provide a preliminary assessment of the proposal by early next week.

A myriad of other organizations, such as the Kaiser Family Foundation and the Center on Budget and Policy Priorities, have analyzed the proposal and have projected dire impacts on funding, health services, and the rate of uninsured Americans. The Medicaid per-capita cap alone is projected to cut federal funding that supports seniors, people with disabilities, families and children, and pregnant women by an estimated $175 billion over ten years and more than $1 trillion over 20 years.

A significant redistribution of federal funds across states would occur through the implementation of block grants with Medicaid expansion states losing over $180 billion for ACA coverage and non-expansion states gaining over $73 billion over a six year period. California alone has been projected to lose federal funds in upwards of $78 billion over the same six year period under the Graham-Cassidy proposal. To make matters worse, the Prevention and Public Health Fund (PPHF) would be stripped of its funding in 2019, severely impacting the services delivered by local health departments.

The number of individuals and groups opposed to the Graham-Cassidy proposal continue to grow significantly. Late this week, the National Association of Medicaid Directors (NAMD), representing all state Medicaid directors, issued a strong statement warning of the massive burden the proposed legislation would have on states. Citing per-capita caps and block grant funding, NAMD declared the Graham-Cassidy proposal “would constitute the largest intergovernmental transfer of financial risk from the federal government to the states in our country’s history.”

Organizations such as the Blue Cross-Blue Shield Association (BCBSA), the American Medical Association (AMA), the American Association of Retired Persons (AARP), and an increasing group of bipartisan governors have also come out in strong opposition to the proposed legislation. CHEAC joined our fellow California county organization colleagues in a recent opposition letter to the Graham-Cassidy proposal over concerns with capping Medicaid federal funding and the impact on the uninsured rate.

In addition to McCain and Paul announcing their intention to vote against the legislation, the clock is ticking for Senate Republicans to pass the Graham-Cassidy proposal as key procedural powers that permit the passage of measures with only a simple majority expire on September 30. Typically, major legislation requires 60 votes to gain passage in the Senate.

Bipartisan efforts to stabilize the health insurance marketplace and fix the ACA between Senators Lamar Alexander (R-Tennessee) and Patty Murray (D-Washington), chair and vice chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, respectively, were shelved earlier this week as Republicans instead took up pursuit of the Graham-Cassidy proposal.

A hearing is set for H.R. 1628 on Monday in the Senate Finance Committee, though it remains to be seen if Senate Republicans will still hold a floor vote on the Graham-Cassidy proposal to make good on their seven-year long promise to repeal the ACA once and for all.